View Full Version : Universal backs free music offer

31-08-06, 16:40

Vivendi Universal, the world's biggest music group, has signed a deal to make its music catalogue available on a free legal downloads service.

Under the agreement, Spiralfrog will offer Universal's songs online in the US and Canada. New York-based Spiralfrog will launch its service in December and make its money by carrying adverts on the site. Spiralfrog aims to take on market leader Apple's iTunes service, which charges 99 cents per song in the US. "Offering young consumers an easy-to-use alternative to pirated music sites will be compelling," Spiralfrog Chief Executive Robin Kent said. Mr Kent, the former head of the Universal McCann advertising agency, added that his research suggested that in return for free music, young people would be willing to endure adverts - as long as the brands and products were relevant to them.

'Shrewd move'

US-based music industry legal specialist Josh Lawler said news of the new service was "inevitable". "It's a very shrewd move by Universal," he told BBC News. "The music industry is going to a point where all delivery will probably be some form of downloading or streaming." Figures from the International Federation of Phonographic Industries (IFPI) estimate that for each legal download, 40 are done illegally. Mr Lawler added that the success of Myspace had underlined the power of the internet to make or break artists - as well as proving that advertising-based formats can work.

Funding question

But while Spiralfrog is discussing possible deals with other big record firms, questions still remain over how the artists featured on Spiralfrog will be paid. "The internet is very much a viable media, but the trick is going to be getting it off the ground in the first place," Mr Lawler added. "Spiralfrog will have to find a way to pay artists from the advertising dollars they are generating. But they're not necessarily going to know how many advertising dollars there are and so some artists are going to be hesitant about it," he said.

Downloads Industry
60m MP3 players sold worldwide 420m single tracks downloaded Revenues from music downloads for MP3s and mobile phones totalled $1.1bn 350 legitimate download sites in 2005, up from 50 in 2003

Full story bbc.co.uk (http://news.bbc.co.uk/1/hi/business/5294842.stm)

I wonder how long this will last? With it being funded by adverts, how will they be displayed exactly, and how long will it be before users can easily circumvent the displaying of ads?